Bus 430 Week 5 Assignment

412 Words2 Pages
1. Summarize the political risks of operating a manufacturing company in China. With over 20 years of plastic manufacturing experience, Riordan Manufacturing has proven the industry their design concepts, manufacturing capabilities, product quality, and care for their customers have placed them where they are today. Still, with everything Riordan has to offer, they may still become vulnerable to foreign political environments when Riordan chooses to expand its global operations. With current successful operations in Hangzhou, China, Riordan now has plans on continually expand its manufacturing operations in China. Although it may sound and potentially be a swell idea, there are many political risks that Riordan Manufacturing will have to overcome. The number one political risk Riordan will be faced with will be government interference due to being a foreign company. The major interferences can be from nationalization of industries through asset confiscation, currency inconvertibility, to contract repudiation with respect to government owned firms. Just these three political interferences could eventually seal the fate of Riordan Manufacturing operating abroad. Still, there are many benefits to operating overseas; all is needed is a solid business plan. One major advantage is the level of education and experience the country has to offer to its customers when it comes to meeting the rigorous standards of exporting by Western legislations and consumers. Secondly, labor is significantly cheaper than India and most foreign countries. 2. Outline the possibilities for foreign securities. Security is top priority for any company, especially when conducting business in a foreign country. A country needs to ensure to its citizens and foreign visitors the country is secure and is welcoming of all foreigners. Still, a country like China with its prestigious

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